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Tourism market in China

According to the World Tourism and Trade Council, China in 2011 surpassed Japan to become the second-largest travel and tourism market in the world. Yet China’s travel industry is still in its infancy. A better understanding about this industry could provide opportunity for travel-related companies to gain a first-mover advantage. In this report, China tourism market is divided into two parts, domestic and outbound, for general analysis.

Chinese tourists online

Domestic Tourism

In the recent decade, domestic tourism had a continuous increase of around 10% each year, which and now contributes over 4% to the growth of the country’s GDP and greatly enhances the employment, consumption and the economic development of China1. The steadily developing economy and a growing demand in different style relaxing lead to the rise in domestic tourism.

Meanwhile, the image of the Chinese tourist has changed a lot over the years, from hoards of people dashing about taking photos and frantically shopping to slowly enjoying their surroundings and leisurely sightseeing. Especially the tourists aging above 55, staying in one place and experiencing the local life style are the first traveling model they choose. Usually, cities located in Western China like Xian, Guilin, Chengdu and Kunming with slow pace of life become their destinations.

Xizang and Inner Mongolia are the most popular among “digital natives” Chinese2 generation, who are highly educated and in the age group of 25-35 years. These tourists can be characterized by increasingly self-organized, hyper-connected, in search of unique and further destinations, urban and sensitive “green touch”. The young are embracing do-it-yourself travel arrangements for domestic leisure trips. Most of them may have had little experience with leisure travel (actually fewer than 200 million have taken an overnight leisure trip), so they seek out online travel sites for recommendations, information, and reservations. These young travelers typically care less about basic services, such as the price and cleanliness of their accommodations, than they do about value-added extras. With an average of 25 million Chinese taking their first overnight leisure trip every year, that number will at least double by 2020.

For the people aging from 35 to 55, more money but less space time and energy are their main characteristics. Although still popular, the sightseeing and shopping tours are being replaced with holidays that focus on rest and relaxation. A small town providing access to the nature always is their choice. There they spend the holiday on fishing or picking fruits. They are no longer price-concerned but care more about the accommodations and services.

market-research-china-how to attract chinese tourists

Outbound Tourism

Nowadays Chinese people are eager to go sightseeing overseas which creates an immense market for the world. In 2013, China’s outbound tourism market grew rapidly, with 45 million Chinese travelling abroad in the first six months. That’s an increase of 17.0% compared to the same period of previous year, with the outbound expenditure reaching $63 billion USD, an increase of 35% on last year. Altogether over 97 million Chinese visited foreign countries/regions in 2013, 18% more than in 20123.

“We see more and more Chinese interested into learning foreign language. In a purpose of travelling, but also expatriation of new life abroad. For example, we see more and more Chinese willing to pass the TOEIC and TOEFL. TOEIC and TOEFL preparation are becoming a huge market in China » said T. Jenr, analyst for TOEFL and TOEIC preparation plateform GLOBAL Exam.

About 85% of Chinese tourists travel in Asian-Pacific countries, which make China the first country issuer of tourists in countries such as Thailand and Malaysia.

China’s Tourism Market Analysis

According to market research company Daxue Consulting, the reasons for these short-distance trips are numerous and include appreciation of Chinese currency, welcoming visa policies of foreign countries/regions, the increased numbers of international flights and even the entertainment influence (Japan and South Korea). Nearly 5 million people traveled from mainland China to Thailand in 2013 (85% more than in 2012). This staggering increase could be down to the film “Lost in Thailand”4. Because the PRC government in 2008 shortened the one-week Labor Day holiday to one day and added three traditional Chinese holidays to other months, it seems Chinese prefer short trips rather than long ones within public holidays.

Although Europe and America only attracted around 15% outbound travelers last year, there is a huge growth potential in these areas. Chinese phenomenon that parents send children abroad for further study leads a trend called parent outbound tourism. Owing high social status and great fortune in China, this kind of tourists bring a huge income to foreign tourism industry and became the target customers. Another factor that might stimulate the outbound market is the UK simplifies the process of visa application which can be finished within 24 hours from August. Requiring Chinese travelers to fill out extensive forms and travel far for in-person application delivery and interviews, the inconvenient and troublesome visa process used to affect the final choice of destination. But now nearly half a million travelers from China are estimated to visit England per year.

Travelling as part of a tour group is still the predominant kind of travel by Chinese tourists. The convenience and comfort of tour groups provides tourists with a safe travel environment, taking care of visa hassles and guiding Chinese tourists through language barriers and maximizing output of the trip with tightly packed travel schedules. The ideal number is 4-6 in a group.

For travel outside of China, people used to rely on travel agents, not only for the convenience of handling any visa requirements, but also because agents help bridge cultural differences and language barriers. However, the effect of agents is decreasing. In 2013, travel agencies helped 33,557,091 people to travel overseas5, which meant only one out of three needs the help from travel operators. By booking flights, hotels and other self-serviced products online, the number of visitors traveling independently surpassed those who utilized organized tours to become the main force of China’s outbound tourism market.

The vast Chinese market has a much segmented consumer population that differs across ages, incomes, geography, education etc. To tap into the travel market potential, destinations should target the needs of both the inexperienced Chinese travelers that look for the convenience of package deals and the safety of tour group travel and the more individual and specific needs of the experienced travelers that look for more interest-based and in-depth travel experiences.